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MELBOURNE, Australia (Radio Australia, Oct. 20) – Air New Zealand says it expects its profits to fall 57 percent in the current year to June because of surging oil prices.

The airline's chairman John Palmer has told the company's annual meeting in Auckland he hopes the airline will recover close to US$150 million through fuel surcharges on ticket sales.

But Mr Palmer has added the surcharges could hurt demand.

As part of moves to reduce costs, the new chief executive Rob Fyfe says Air New Zealand is planning to outsource much of its heavy maintenance of aircraft bodies and engines, possibly to Asia.

The move could lead to the possible loss of 600 jobs from Air New Zealand Engineering Services.

Following the news, Air New Zealand shares closed down slightly on the New Zealand Stock Exchange to one-New Zealand dollar and seven-cents.

October 20, 2005

Radio Australia:

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